Clean Up Your Finances This Spring

By Certified Financial Planner Board of Standards, Inc.

The sun is shining and birds are chirping, which can only mean one thing – spring is finally here. While many people start to spend more time outdoors, for others the season carries heavier obligations, including tax  preparation.

“Just like spring cleaning, you’ll inevitably be asking the ‘save or keep’ question many times as you prepare your taxes or clean out your desk drawers,” says CFP Board Consumer Advocate Eleanor Blayney, CFP®. “Without some guidelines, you may find yourself once again stuffing everything in one big envelope to be dealt with ‘some other  time.'”

In her latest contribution to LetsMakeaPlan.org, Blayney outlines some simple steps consumers can take to de-clutter and reorganize their finances this spring-cleaning  season.

  • KEEP: Buy a file cabinet. Information that must be kept permanently and in its original form – marriage, birth, adoption, citizenship and death certificates; veteran’s papers; health records – should be kept in a file cabinet. Other documents, such as passports and legal contracts, while not necessarily permanent, should be stored in the cabinet as well. Physical filing cabinets should be fireproof and secured with a lock, with the key or combination ideally given to your estate executor and/or trustees.
  • KEEP: Use online storage and buy a scanner and back-up device. Now that we’re in the 21st century, it is time to go digital. Online storage in the “cloud” makes sense for information you need to retain for a period of time, but not necessarily in its original form. Documents such as mortgages and student loans and banking, credit, and investment account statements can all be saved electronically, online and/or scanned and backed up to hard drive or similar device. It is important to remember that regular back-ups of your information will be necessary. And many CFP® professionals provide encrypted online vaults for storing scanned information, in which case a strong password replaces a sturdy lock.
  • KEEP: Buy an expandable folder. Utilizing an expandable folder with organizational tabs will allow you to file items that are regularly replaced, such as your annual Social Security benefits statement, property, auto, health insurance policies and more.
  • TOSS: Buy a shredder or hit delete. We receive an overwhelming amount of mail, either online or physically delivered, that we hang on to because we’re unsure if we will ever need it or not. Consider an economists’ approach to the “save or toss” question: Compare the benefit of tossing to the cost of retrieval, multiplied by the probability the information will be needed. Usually, you’ll end up tossing.

“Taking these organization steps will undoubtedly result in a tremendous sense of relief, even a sense of lightness,” says Blayney. “Working with a CFP® professional will help you stay organized, calm, cool and collected during this financial reorganization season, and all year  long.”

ABOUT CFP  BOARD
The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning. The Board of Directors, in furthering CFP Board’s mission, acts on behalf of the public, CFP® professionals and other stakeholders. CFP Board owns the certification marks CFP®, Certified Financial Planner™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.  CFP Board currently authorizes nearly 74,000 individuals to use these marks in the  U.S.

SOURCE Certified Financial Planner Board of Standards,  Inc.

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